Winds of change at Net1 after social grants fiasco

NET1 has made changes to its contract with the South African Social Security Agency (Sassa) aimed at tackling concerns about cross-selling of financial products to grant recipients.

It has also given an undertaking to keep beneficiary data private.

Net1 confirmed it signed an addendum to its contract with Sassa.

“The addendum extends the contract for 12 months to March 31 2018, under the current terms and conditions, and also includes the specific terms as ordered by the Constitutional Court,” Net1 said in a Sens announcement at the weekend.

In the addendum, Net1 subsidiary Cash Paymaster Services (CPS) says it has made amendments to the Sassa contract to stop “opt- in” arrangements.

It will no longer invite recipients to “opt-in” to sharing their confidential information for the marketing of goods and services.

In addition, it has committed to getting “an undertaking from Grindrod Bank that it shall not invite beneficiaries to ‘opt-in’ to the sharing by Grindrod Bank of beneficiaries’ [data] for the marketing of goods and services when opening Sassa card-linked accounts for beneficiaries”.

Civil society activists have campaigned for years to prevent CPS associates, such as Moneyline, from using information they say is gathered from recipients to sell products, including loans.

Activists said the move was encouraging but questioned how it would be policed.

Sassa chief executive Thokozani Magwaza welcomed Net1’s commitment to ensuring uninterrupted distribution over the next 12 months but pointed out Net1 had little choice given the Constitutional Court’s ruling.

“There were things Net1 wasn’t happy with but we reminded them of the court’s ruling and in the end they agreed,” said Magwaza, who spent the weekend monitoring Sassa payment sites in the Western Cape.

He said now that the crucial April payment was settled, Sassa and the Department of Social Development would work on a plan to replace CPS.

Magwaza said they would encourage recipients to use a bank account as it was more convenient for the recipients and cheaper. — TMG